Rio cuts again
Over 1,000 more jobs are being axed at mining giant Rio Tinto as it slashes production through closures and sell offs.
The latest blow to miners follows plans announced by the group in December to lay off 14,000 workers worldwide .
Facilities in Canada and Europe are particularly hit by Rio Tinto Alcan’s most recent plan made “in response to global economic conditions”, the UK and Australia-listed group said in a stock exchange announcement on Tuesday.
Having said last month that is was slashing aluminium production by 5%, Rio has lumped another 6% cut - or 230,000 tonnes annually - on top of this. An almost 6% cut in alumina production worldwide is also on the cards.
Dick Evans, chief executive of Rio Tinto Alcan, said of the cuts: “Our goal is to align production with customer demand and reduce our operating costs as much as possible. Increasing efficiency throughout our operations and streamlining our organisation will be crucial to achieving our objectives and preserving value for shareholders.
“Plans are in place to reduce the workforce by approximately 1,100 roles (300 contractors and 800 employee roles). In addition, substantial cost reduction programmes are being implemented across all Rio Tinto Alcan facilities.”
Jacynthe Cote, president and chief executive of primary metals in Rio Tinto Alcan, rationalised the job losses thus: “The global economic downturn has meant that we must make difficult but necessary choices for our organisation, and we will make sure that those affected are treated with fairness and respect.”
Amongst the measures being taken is the selling off of Rio Tinto Alcan’s 50% stake in a joint-venture alumina smelter in Ningxia province, China.
The company is shutting doors at the Beauharnois smelting facility in Quebec by the end of the second quarter with the loss of 220 jobs. The site, which has been open since 1943, produces 52,000 tonnes of aluminium annually.
Alumina production at the Vaudreuil plant in Canada is being cut back 25% by 400,000 tonnes annually although Rio Tinto said this curtailment is “temporary”.
The Saint-Jean-de-Maurienne facility in France, which has already seen production cuts in 2008, will now be subjected to further cuts while alumina production at the Gardanne refinery, also in France, is being scaled back 15% by 105,000 tonnes.
Rio Tinto had already announced recently that it was halting smelting operations at Anglesey Aluminium, a UK-based joint venture, “due to unsuccessful power negotiations”. Plants in New Zealand and Cameroon are also going to be less busy this year.
Rio Tinto said in early December that it was axing 14,000 staff and looking to sell off “significant assets” in an effort to slash its net debt by $10bn.
The “detailed package of measures”, which included paying out $400m in upfront severance costs, were being drawn up “in response to the unprecedented rapidity and severity of the global economic downturn”, it said.